- Wall Street indices open lower
- US2000 tests lower limit of the upward channel
- Intel drops after reporting big loss in foundry business
Wall Street indices launched today's cash trading slightly lower, deepening yesterday's declines. S&P 500 dropped 0.2% at the opening, Dow Jones was 0.1% lower and Nasdaq declined 0.4%. Small-cap Russell 2000 was top laggard with 0.8% drop at session launch.
ADP report released earlier today showed a bigger-than-expected employment gain of 184k in March, providing a support for US dollar and putting some pressure on US equities. Traders will be offer one more piece of key US data today at 3:00 pm BST - services ISM index for March. It is expected to show headline index staying virtually unchanged compared to February.
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile app
Source: xStation5
Russell 2000 futures (US2000) underperform other major Wall Street indices again. Taking a look at US2000 chart at H4 interval, we can see that the index has been trading in an upward channel mid-January 2024. Index has recently climbed to 2,165 pts area, the highest level since mid-January 2022, but failed to break above the upper limit of the channel in the area. A strong pullback was launched and the index is now testing the lower limit of the channel in the 2,075 pts area. Should we see a break below this technical hurdle, a deeper downward move may follow. Textbook range of the downside breakout from the channel suggest possibility of a move to as low as 1,980 pts area.
Company News
Intel (INTC.US) launched today's trading lower. Company said that its foundry unit generated an operating net loss of $7 billion in 2023 on revenue of $18.9 billion. This is a deeper loss operating loss than $5.2 billion reported at Intel's chip manufacturing business in 2022. Moreover, revenue in the unit in 2023 was 31% lower than in 2022 ($27.49 billion). Pain is not yet over with Intel CEO saying that he expects 2024 to be the worst year in terms of operating losses at the foundry unit. Unit is expected to reach an operating break even in 2027.
US-listed shares of Taiwan Semiconductor Manufacturing Company (TSM.US) are trading lower today after the company had to pause manufacturing and evacuate some facilities after 7.4 magnitude earthquake hit Taiwan earlier today.
Analysts' actions
- Wolfspeed (WOLF.US) was downgraded to 'equal-weight' at Wells Fargo. Price target was set at $30.00
- Dollar Tree (DLTR.US) was downgraded to 'hold' at Gordon Haskett. Price target was set at $140.00
- Lowe's (LOW.US) was downgraded to 'hold' at Gordon Haskett. Price target was set at $245.00
- Carlisle (CLS.US) was rated 'buy' at Goldman Sachs. Price target was set at $455.00
Intel (INTC.US) launched today's trading with a bearish price gap, responding to news of large operating loss in foundry unit in 2023. Stock is testing the lower limit of the short-term trading range in the $41.75 area. A break below could pave the way for a drop to as low as $38.30. Source: xStation5
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
